In this blog post I am excited to have interviewed Andrew a great friend of mine!
Andrew is truly an exceptional, well balanced and successful guy that seems to have been living the FIRE concept long before he found out about the FIRE movement. His driving force of moving towards a life of sustainability, independence and consistent income from a portfolio of very diversified streams makes for a great read.
I asked the exact same 3 key interview questions to Andrew and the full Q & A is here:
Who are you and how did you discover fire?
My name is Andrew, and I am 40 years old, married with two small kids. I am a professional working in the construction industry.
My introduction to FIRE as a concept came about, around two years ago, by reading Vicki Robbins book, “Your Money or Your Life”, I would highly recommend it as an introduction to FIRE.
It mentioned FIRE and following a few google searches I was a member of the Limerick FIRE meetup group.
Even though I found FIRE as a formal concept some two years ago, I believe I have been on my FIRE journey for close to two decades prior to this. After graduation from college and following a few years of professional working, I realised I had entered an industry that was extremely prone to boom bust cycles. When things were booming, it means, long unsociable hours were very much the norm, and during bust periods, companies downsize and lay off their staff. So, with this in mind I realised if I were going to stay in Ireland within this industry, I would need reliable sources of alternative income. So, at 23 I decided to harness my construction skills and purchased a site and built a house. So my FIRE journey had started without me even knowing it!
What is the backbone of your fire strategy?
My FIRE strategy is based on 80% income from rental property and 20% income from Share Dividends. I have benefited from the advantage of time; I currently have one house fully paid off and a second house shall be mortgage free within two years. Over the last two decades I have managed to build up a portfolio of four rental properties and I also have no mortgage on my home.
Three of the houses are rented to Local Authorities on RAS, HAP and LTL, and the last house is rented privately.
I am currently self-employed and shall begin in the coming years to take my rental income as salary and allow my limited company income to accumulate within the company. This will effectively allow me to release a large portion of my emergency fund as my company account will act to provide a period a guaranteed salary, in case of an emergency.
The last portion of my proposed income is through dividend income. My portfolio is based on a spilt of 60% dividend focused and 40% growth focused. I have some individual company shares, although the main element of my portfolio is ETF based. ETF income is taxed at a flat (no PRSI or USC) 41%, which is appealing to me giving the fact that I am automatically pushed into the high bracket of tax because of the rental income. There are many ETFs available on the markets which will provide a dividend yield of approximately 4% per year, usually distributed quarterly.
Over the last twelve months, I have also been working to build up my holding of Investment Trusts, from a growth perspective these closed ended investment companies, are very suitable for Irish investors, there is of course the currency risk to factor in, as most investment trusts are traded on the London stock exchange.
Anyone interested in these should read, John Barons book, “The Financial Times Guide to Investment Trusts: Unlocking the City’s Best Kept Secret”, it’s an excellent book and very informative.
When investing in income generating securities I only focus on ETFs, investment trusts, or stocks with a proven track record of increasing their annual dividend over a prolonged period of time. We all need a pay rise every year! Anyone interested in this form of income should research Dividend Heroes (investment trusts) or Dividends Aristocrats (ETFs).
How do you plan to spend time when you are FI, and any plans?
I have been struggling with this question for some time now. As I stated above, if things continue as planned, I will reach my FI position within the next two years. At present my thoughts are along the lines, of cutting my work week to two days and continue along this path for a while.
Our careers can be personally defining and to stop working within a career that has shaped half our lives is difficult to comprehend. My job can have unhealthy amounts of stress involved so my aim is to move to a position where I can leave this stress behind and focus my extra time on my young family.
I love growing much of our family fruit and vegetables as a hobby at the moment, so I plan on increasing production in the coming years.
(Well, we all need something to aspire to!!!!!)
Yes, well said and thank you Andrew!